PARMATMA INVESTMENTS PVT LTD.,,MUMBAI vs. ITO-3(2)(4), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘ SMC‘ BENCH MUMBAI BEFORE: SHRI KULDIP SINGH, JUDICIAL MEMBER ITA No.612/Mum/2023 (Assessment Years :2010-11)

Parmatma Investments Private Vs. ITO-3(2)(4), Mumbai Room No. 1628, 16th Floor, Air Limited, Flat No. 4, 4th Floor, West Hill India BLDG, Nariman Point, Building, 27 Nepean Sea Road, Mumbai. Near Bank of Baroda, Mumbai- 400026. PAN/GIR No. AAACP152B (Appellant) .. (Respondent)

Assessee represented by Shri Rajesh Shah Revenue represented by Shri Joginder Singh, Sr. AR Date of Hearing 08/05/2023 Date of Pronouncement 08/05/2023

O R D E R PER KULDIP SINGH (J.M):

The Appellant, Parmatma Investments Private Limited (hereinafter

referred to as the ‘assessee’) by filing the present appeal, sought to set

aside the impugned order dated 08.02.2023 passed by the National

Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the

‘CIT(A)’] qua the assessment order for Assessment year 2010-11 on the

ground inter-alia that:-

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“ 1.On the facts and circumstances of the case, CIT(A) erred passing an ex-parte order on 08.02.2023 though the appellant had asked an adjournment up to 09.02.2023. The appellant was not provided an opportunity to represent the case. The order is required to be set aside to the assessing officer. 2. On the facts and circumstances of the case and in law, the AO did not provide any material of the basis of which AO came to conclusion that there is a client code modification of Rs.31.25,085. The Appellant has no information in respect of the code modification alleged to be carried out. There are no such entry in the account of said M/s Integrated Masters Securities Pvt. Ltd. 3 On the facts and circumstances of the case and in law, the AO as well as NFAC (CIT(A)) did not provide information in respect of client code modification of Rs.31,25,085 to rebut the allegation made in the order and hence the case required to be set aside. The appellant be provided with full details in respect of alleged so called code modification entries. The appellant states that it is not beneficiary to any such transaction. 4. On the facts and circumstances of the case and in law, the reopening of the assessment is bad in law. 5. On the facts and circumstances of the case and in law, the addition made by the AO in respect of NSE future loss amounting to Rs. 31,25,085 is bad in law and not based on facts. 6. On the facts and circumstances of the case and in law, the AO wrongly added commission of Rs.62,502 though no such amount was paid nor any queries were raised during the assessment proceedings. The CIT (A) erred in not considering the same by passing an ex-parte order. 7 On the facts and circumstances of the case and in law, the AO wrongly disallowed an amount of Rs.36,288 under S 14(A) of the Act and CIT(A) erred in not considering the fact that the provisions are not applicable. The CIT (A) erred in not considering the same and passing the an ex-parte order. 8. The appellant craves leave to add, amend, modify, cancel and or substitute any of the grounds of the appeal.”

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the issues at hand are : The assessee company is into the business of

dealing in shares and securities. During the year under consideration, the

assessee filed its return of income declaring loss of Rs. 23,42,446/-, which

was processed under section 143(1) of the Income Tax Act, 1961 (in short,

“the Act”). Subsequently on receipt of the information from DIT ( I &C) ,

Mumbai that fictitious profit and losses is created by some broker by

misusing the client code modification (CCM) in F & O segment on

National Stock Exchange (NSE) during March, 2010 and the assessee is

one such beneficiary, assessment was reopened by initiating the

proceedings under section 147/ 148 of the Act. From the profit and loss

account the AO noticed that the assessee has shown loss from NSE future

trading amounting to Rs. 51,15,300/- from commodity trading of Rs.

42,463/- and speculation loss of Rs. 9,78,071/-. Declining the contention

raised by the assessee AO proceeded to make addition of Rs. 62,502/- as

unexplained expenditure of the assessee by way of commission to the

broker in taking fictitious loss to the tune of Rs. 31,25,085/-. The AO also

made addition of Rs. 36,288/- by way of disallowance under section 14A

of the Act and thereby framed assessment under section 143 r.w.s. 147 of

the Act.

appeal who has confirmed the disallowance by dismissing the appeal filed

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by the assessee. Feeling aggrieved with the impugned order passed by the

Ld. CIT(A), assessee has come up before the Tribunal by way of filing the

present appeal.

appeal, perused the order passed Ld. Lower Revenue Authorities and

material available on record in the light of the case law applicable.

AR for the assessee that impugned order is passed by Ld. CIT(A) at back of

the assessee without providing opportunity of being heard and without

deciding the case on merits, which fact is not controverted by the ld. DR for

the Revenue.

para-2 shows that two opportunities were stated to have been given to the

assessee, but he has not given any response and thereby proceeded to

dismiss the appeal filed by the assessee for non-prosecution.

provided with adequate opportunity of being heard as it is a fact on record

that the assessee had moved an application for adjournment with the Ld.

CIT(A), as is evident from e-proceedings response acknowledgement,

available at page 14 of the paper book wherein it is mentioned by the

assessee that CA is out of station to be back by on 08.02.2023 so we

would request you for adjournment of 15 days. Strangely enough no

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reference of this adjournment application moved by the assessee has been

given in the impugned order by Ld. CIT(A). To impart the justice and to

decide the issue once for all and to stop multiplicity of proceedings the

assessee is entitled for adequate opportunity of being heard. Consequently

order passed by Ld. CIT(A) is hereby set aside to be decided afresh by him

by providing opportunity of being heard to the assessee.

purposes.

Order pronounced in the open court on 08/05/2023.

Sd/- (KULDIP SINGH) JUDICIAL MEMBER

Mumbai; Dated 08/05/2023 Santosh, Sr. PS

Copy of the Order forwarded to : The Appellant 1. The Respondent. 2. The CIT(A), Mumbai. 3. CIT 4. DR, ITAT, Mumbai 5. BY ORDER, Guard file. 6. //True Copy// (Sr. Private Secretary / Asstt. Registrar) ITAT, Mumbai

Initial Date 1. Draft dictated on 09/05/2022 Sr.PS 2. Draft placed before author 10/05/2023 Sr.PS

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